Creating Opportunities and Entry points for Local Innovators to Digitize Government Functions

August 20, 2021

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The COVID-19 pandemic triggered an unprecedented demand for digital technology solutions in ensuring continuity of critical services and in accelerating overall recovery in bureaucracies

The integration of technology in services has opened up a new and exciting space for experimentation by digital entrepreneurs whose demand is now growing not just in the private sector but also in the bureaucratic settings of government. 

Confronted with this new reality and new prospect, UNDP Ethiopia initiated a business continuity planning initiative with government institutions in 2020 to mitigate the effects of the pandemic in Ethiopia. The initiative focused on creating an integrated and whole-of-government approach to minimizing the disruption of critical government services, through among other actions, installation of incident management systems, disaster response and recovery capabilities, and generally the adoption of new business continuity practices through training. The success of this intervention planted a seed for digitalization that has the prospect of replication and scaling up. 

As a background, the socio-economic impact assessment conducted by the United Nations in Ethiopia following the outbreak showed us that scaling up digital transformation in the public and private sectors would support the development of a strong digital ecosystem for business continuity and sustainability in Ethiopia. 

The digital economy in Ethiopia is nascent with few government-driven digitalization initiatives and the urgent need for coordination and collaboration among different sectors, institutions, and stakeholders to strengthen and enable an inclusive digital economy. The government's digital strategy points to improved digital interactions among the government, private sector, and citizens. 

So, we set out to test a model for a public-private partnership for government technologies within the context of the pandemic that enforces the need and urgency for digital technologies. We wanted to see how we can create opportunities for small start-ups that can't participate in large scale national-level technology procurements; yet can provide tailored need-based technologies that are not meet by tools deployed nationally. 

What we did

UNDP Ethiopia's accelerator lab partnered with the Ministry of Innovation and Technology to enlist local innovators in a pilot initiative intended to digitize critical government functions linked to business continuity. The innovation challenge identified and is testing innovative solutions that can allow government institutions to continue providing critical services to the public. Moreover, the challenge grant connected the public and private sector in a co-design effort. This linkage was a win-win partnership, assisting government institutions to provide services efficiently while supporting private technology sector growth. 

Challenge creation 

It was critical to define the challenge closely with the government institutions, so we conducted a multi-phased problem definition process that included: 

  • General assessment: 34 Government organizations supported by the UNDP business continuity project outlined challenges their organizations face when it comes to digitization, especially what critical services they have been struggling to digitize. The challenges identified provided a bird’s view of the organization's needs, and we narrowed these down into a shortlist based on the complexity and scalability of the ask.
  • Challenge Co-creation:  We went through a deep dive with the selected organizations to break down the pain points and create challenge statements. The goal here was to put together a comprehensive guide to the challenge shared with applicants.
  • Challenge Validation:  We had a short process of validating the challenge with experts and citizens to ensure it focused on the current problem and that it described it accurately. This approach helped to ensure that the challenges received the right, probable solutions. 

Once the challenge areas were identified, we created an online application portal and advertised the challenge grant on different platforms inviting bids from prospective digital entrepreneurs. We received 174 applications across the eight challenge areas identified, from which 134 of them passed the first-round screening, which looked at the eligibility of the applicants and whether they met the basic requirements. 

Subsequently, an evaluation committee comprising representatives from UNDP, INSA, TECH-IN, MINT and Ethiopian Innovator Association conducted two rounds of evaluations. The evaluation included reviewing documentation, presentation, and budget to identify a solution for the challenges outlined by the different institutions. Finally, seven potential innovations were selected and enrolled into a business incubation program led by X-Hub Addis to refine their products and create a business model that would allow them to experiment. 

The selected solutions will now be refined and tested with the institutions through grant funding and business development support during the process. The clients' involvement in the development phase will increase the relevancy of the solution, but it also requires a commitment to the process from both sides. Once the solutions are tested, it is up to the institution and the start-up to implement. The grant process will connect the start-ups with the institutions, but it will also support the testing. 

What we learned

From this model of public-private partnership, we learned a number of things that are worth mentioning here:

  • From the demand side: Government institutions have a strong appetite and optimism for digital tools that can simplify their lives and help them serve people better. They have clear ideas about what they want and need, but the challenge is having the infrastructure and technical know-how to implement these digital tools. Urgent investments in training staff quickly to understand and apply revised procedures and protocols and using virtual methods is needed.
  • From the supply side: Many entrepreneurs are interested in building digital service tools and have taken up the cause independently to explore the solutions on their end. We saw some applications which have reached prototype level and are testing their tools with government institutions at regional levels. They are self-starters who are building their technical know-how and bringing it to the market-place.The Market: While still in the middle of seeing how the piloting and solution refining goes, we saw a real need for a structured process that can create room for smaller technology companies and start-ups to develop their competencies alongside the government. Governments can provide an opportunity to accelerate digital technologies, especially true for Ethiopia, where there is a need to grow the private and technology sector. Here the government can create a conducive environment but also in leading by example. 

Digital Infrastructure: Currently, Ethiopia suffers from poor connectivity, which is not necessarily an issue of resources, just one of prioritization. Ultimately, in the medium to long term, UNDP will use this intervention to advocate for policy reform to allow for increased connectivity across the country. In the meantime, establishment of alternate working arrangements and workflows, use of innovative solutions including ICT will create the appetite for the adoption of e-governance and e-service provision for key functions, encouraging online rather than in-person contact.

What is Next 

The transformation to digital solutions is critical to support business continuity during and beyond the COVID-19 pandemic. However, improving access to essential services to all citizens and accelerating the digitalization of services must be done carefully to avoid widening the ‘digital divide’ between economic sectors and those with differing abilities.

The support for product and business development support for the innovators includes training on how to build their capacity to continuously innovate on their solutions and approaches beyond selling their products. 

Moreover, our incubation partner X-Hub will help the innovators refine their business model to be accessible to government clients and the community. The accelerator lab is also exploring partnerships with our Democratic Governance and Peacebuilding Unit of UNDP with a view to jointly growing the solutions once they prove to be working. 

If you are interested in this topic and have any ideas or suggestion, we would love to hear from you throughout email address.